Ethiopia Productive Safety Net Programme (PSNP): Prospects for graduation and sustainability beyond 2014

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1 Ethiopia Productive Safety Net Programme (PSNP): Prospects for graduation and sustainability beyond 2014 Safety Net Core Course, Washington D.C. 16 Dec 2010

2 Presentation Objectives 1) To assess the feasibility of large scale graduation from the PSNP by 2014; 2) To recommend options for future social protection interventions after 2014

3 Country & Programme Context Country Population: 80 million Per capita income: $990 (2010) Official Poverty level: 39.4% (2006) 1990 s between 5 14 million people needed food aid EVERY year.. Which led to PSNP Programme The PSNP and HABP target 7.57 million chronically food insecure rural citizens (approximately 10 percent of the total population), residing in 290 of 710 woredas nationwide in eight of the ten Regions

4 Not only significant differences in wealth categories, massive diversity in ways of making livelihoods across the country

5 Poverty levels in Ethiopia national poverty line, $1/day and $2/day $2/day National poverty line $1/day

6 Poverty analysis Poverty level = 39% Poverty gap = 8.3% Population = 80,000,000 Numbers of people below the poverty line = 31,200,000 National Poverty line = ETB 1,075 (US$ 67) per annum Budget needed to cover gap = 8.3% * US$ 67 * 31,200,000 = US$173,503,200

7 PSNP profile PSNP is a safety net designed to addresses chronic food insecurity through: unconditional transfers (to those unable to work) approx 15% of clients conditional transfers (to those able to provide labour to community asset building) 85% of clients PSNP has: protective function through cash and/or food productive functions through asset building (public works) components It is a government programme supported through multidonor financing;. Targeting: chronically food insecure areas (geographic); and chronically food insecure households (administrative and community based targeting); Cost of the PSNP as a percentage of GDP = 1.2%

8 Income gap for 3 lowest deciles ($1/day) PSNP transfers fill between 25-35% of food gap for clients Contribution of PSNP in filling gaps in lowest 3 deciles between income and $1/day

9 Moving towards Graduation from the PSNP In the context of Ethiopia, graduation from PSNP occurs when in the absence of receiving PSNP [or emergency] transfers it can meets its food needs for 12 months and is able to withstand modest shocks As of 2010, around 500,000 individuals had graduated from the PSNP The range of projected graduates from the PSNP varies between 50 80% between 2010 and 2014

10 Graduation pathways (through the PSNP and HABP)

11 Experiences with Graduation in Opportunities: practice HABP/PSNP complementarity Graduates stay one additional year When substantial credit was taken ($700) this resulted in net changes of income between ETB 8,500 and 28,000 and a return on investments of between 2.13 and 5.63 over 3 5 years. This is the type of investment necessary for sustainable graduation at scale.

12 Experiences with Graduation in Challenges: Credit packages vary but standard credit amount is 2,500 ETB sufficient? Shocks affect growth and can result in a slide back into destitution Low repayment rates with a high of only 72% practice Population pressures

13 Will graduation at scale from PSNP in five years be possible? Pre requisite for Graduation An evidence base for graduation Adequacy & availability of resources for HABP Develop national social protection strategy Link with other complementary Government initiatives Adequate implementation capacity of Government Recommendation Government & DPs to implement, monitor and verify graduation cycle Ensure federal and regional budgets and development plans are appropriate and adequate to meet graduation targets Accelerate the development of the national social protection strategy Ensure the PSNP is integrated into new Government vision for DRM Establish institutional mechanism and capacity to continue to deliver programmes effectively

14 Scenarios for the PSNP after 2014 A With 80% graduation Caseload balance of 20% Options for this client base: 1)Unconditional cash transfers continued (likely to be existing unconditional client base); 2)Development of national social protection system to make it universal B With 50% graduation Caseload balance of 50% - most likely to be: Unconditional transfer clients (20%) Balance of conditional transfer clients (30%). Options for the caseload includes: 1) Continuation of existing PSNP; 2) New CCT approach; 3) Scalable safety net to account for transitory food insecure (i.e. humanitarian needs) 14

15 Short term action points Clarify and reach consensus on graduation targets and process Set a strategy to ensure budget for HABP is available after 2012 Strengthen the existing National Social Protection Platform

16 Thank you!

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